On Dec 7, 2015, at 9:01 PM, Patrick Bond <[email protected]> wrote: > On 2015/12/08 06:16 AM, Marv Gandall wrote: >> Technological advances which are making renewable energy cost-competitive >> have made the global political and economic elites represented at the Paris >> climate talks increasingly receptive to phasing out fossil fuels. > > Marv, reports I'm getting - e.g. from Bolivia's former UN ambassador Pablo > Solon (below) - are the contrary: elites gathered in Paris at the Conference > of Polluters 21 are not willing to seriously consider phase-out. Not just in > the North, especially in the BRICS, where the carbon-pricing process moves > next:http://www.counterpunch.org/2015/12/04/climate-change-casino-carbon-trading-reborn-in-new-generation-mega-polluters/
Interesting links. Thanks, Patrick. Of course, the bourgeoisie is not monolithic; as always, there are sectoral, geographic, and other divisions within it. The major extractors, polluters, and commodity producing nations are generally opposed to any meaningful curbs on emissions, but my strong impression is that the global financial sector is doing more than posturing when it warns about the risks faced by banks and other lenders and investors if cost-effective alternatives displace fossil fuels (“stranded assets”). And why would we not expect that extreme weather events caused by climate change, which are disruptive and costly for insurers and other corporations, would not penetrate the consciousness of the ruling class? The incidence of such events has tripled since 1980. It is not only environmentalists who take these and scientists’ warnings of impending catastrophe seriously. I wouldn’t place much store in what the communiqués say; as you know, they typically conceal more than they reveal, designed as they are to fudge and paper over differences which exist between the signatories in order to bring everyone on board. Beyond the professed good intentions and vague declarations, I think technological change and economic necessity is what will drive efforts to introduce a new energy regime if one should come about. But I’m not convinced as a matter of faith that the system is not capable of reforming itself; it has done so many times before in its self-interest. Which is not to say the global environmental movement should cease pushing the bourgeoisie farther and faster than it might hesitate to go because of its internal contradictions. > > > Art 3ter. New Carbon Markets under the name of Sustainable Development > > By Pablo Solón > > A draft climate agreement and decision with 48 pages and 939 brackets has > been presented to the ministers in Paris on Saturday 5th of December. Many > things can be said about this text. For example, the words “fossil fuels” > don’t appear once. There is no proposal [in brackets] to limit coal, oil or > gas extraction in the coming years, and no proposal to halt deforestation. > Also, as was expected, no text [in brackets] from any country addresses the > issue that current INDCs (Intended Nationally Determine Contributions) will > actually increase the greenhouse gas emissions gap from a surplus of 12 Gt > CO2e in 2020 to around 25 Gt CO2e by 2030. > > > But if you think that burning the planet is bad, some people are now even > planning to turn this tragedy into a business opportunity. This is exactly > what is happening with article 3ter, which is now in the draft agreement. > This new article, in order to pass without being noticed, establishes a > “Mechanism to Support Sustainable Development”. Who could be against that? > The words “carbon markets” don’t appear in any of the text of this article, > so why worry? Carefully read the article to find out why. > > It begins saying: [A mechanism to support sustainable development in > [developing country] Parties is hereby established] … and shall aim to: > [Provide for net global emission reductions through the cancellation of a > share of units generated, transferred, used or acquired]. In other words, > carbon credits from different kinds of projects can be bought and traded, to > offset emissions. Hidden between the lines, the text continues to say that > this Mechanism to Support Sustainable Development will be based on Article 12 > and Article 6 of the Kyoto Protocol. > > Article 6 of the Kyoto Protocol has created carbon markets and offsets by > stating “…any Party included in Annex I may transfer to, or acquire from, any > other such Party emission reduction units resulting from projects aimed at > reducing anthropogenic emissions by sources or enhancing anthropogenic > removals by sinks of greenhouse gases in any sector of the economy…”. And > Article 12 of the Kyoto Protocol created the Clean Development Mechanism that > handles those carbon credits. > > With the new proposal in Art 3ter, the Clean Development Mechanism will most > likely become the Sustainable Development Mechanism, and carbon markets will > not be limited to developed countries (Annex I), but available to all > countries at all different levels: global, regional, bilateral and national. > In other words, all will be free to gamble on the future of the Earth system. > > This is ironic indeed. The Kyoto Protocol is dying. In reality it is a zombie > that has only been ratified by 55 countries, and not the 144 required. But > when it comes to carbon markets, its legacy will live on, and will be > reinforced by the Paris agreement. > > > > *** > > December 4, 2015 > > Climate Change Casino: Carbon Trading Reborn in New-Generation Mega-Polluters > > by Patrick Bond > > Climate change, the biggest threat to the planet, appears to be amplifying, > as the “financialization of nature” through carbon markets resumes in > earnest. The failure of the Kyoto Protocol’s emissions trading strategy in > Europe may soon be forgotten once the emerging markets ramp up their > investments, especially if carbon markets remain a central feature of a Paris > COP21 agreement. If so, several that have begun the process – China, Brazil, > India and South Africa – are likely to open the door to full-fledged markets, > now that (since 2012) they no longer qualify for generating credits through > UN’s offset scheme, the Clean Development Mechanism (CDM). The Kyoto Protocol > had made provision for low-income countries to receive CDM funds for > emissions reductions in specific projects, but the system was subject to > repeated abuse. China is already far advanced, with seven metropolitan > markets covering the major cities’ output, and a national market anticipated > there in late 2016. > > The world’s carbon markets > > In Ufa, Russia, in July 2015, the Brazil-Russia-India-China-South Africa > (BRICS) summit accomplished very little aside from codifying new financial > institutions, especially a New Development Bank which is certain to amplify > the BRICS’ greenhouse gas emissions. On climate change, according to the > final declaration, there were only stock arguments: “We express our readiness > to address climate change in a global context and at the national level and > to achieve a comprehensive, effective and equitable agreement under the > United Nations Framework Convention on Climate Change.” > > The UNFCCC still strongly believes in carbon trading, and indeed its > secretary Christiana Figueres came to the UN from the carbon markets. > > Assuming a degree of state subsidization and increasingly stringent caps on > greenhouse gas emissions, the Kyoto Protocol posited that market-centric > strategies such as emissions trading schemes and offsets can allocate costs > and benefits appropriately so as to shift the burden of mitigation and carbon > sequestration most efficiently. Current advocates of emissions trading still > insist that this strategy will be effective once the largest new emitters in > the BRICS bloc are integrated in world carbon markets. > > Critics, including the Pope, argue instead that, as the June 2015 Encylical > puts it, “The strategy of buying and selling carbon credits can lead to a new > form of speculation which would not help reduce the emission of polluting > gases worldwide. This system seems to provide a quick and easy solution under > the guise of a certain commitment to the environment, but in no way does it > allow for the radical change which present circumstances require. Rather it > may simply be a ploy which permits maintaining the excessive consumption of > some countries and sectors.” > > At the Paris summit of the UNFCCC, the COP21 is anticipated to remove the > critical “Common but Differentiated Responsibility” clause that traditionally > separated national units of analysis by per capita wealth. The COP21 appears > to already have been forestalled in late 2014 by the climate agreement > between Xi Jinping and Barack Obama, representing the two largest absolute > GHG emitters: China and the US. That deal ensures world catastrophe, for in > it China only begins to reduce emissions in 2030 and the US commitment > (easily reversed by post-Obama presidents) is merely to reduce emissions by > 15% from 1990 levels by 2025. Likewise in June 2015, the G7 leaders agreed to > decarbonise their economies but only by 2100, raising the prospects of > runaway climate change. The BRICS bloc’s role in forging inadequate global > climate policy of this sort dates to the 2009 Copenhagen Accord at the COP15 > when a side-deal between Obama and four of the five BRICS’ leaders derailed > the much more ambitious UNFCCC. > > The failure of the carbon markets to date, especially the 2008-14 price > crash, which at one point reached 90% from peak to trough, does not prevent > another major effort by states to subsidize the bankers’ solution to climate > crisis. The indicators of this strategy’s durability already include > commodification of nearly everything that can be seen as a carbon sink, > especially forests but also agricultural land and even the ocean’s capacity > to sequester carbon dioxide (CO2) for photosynthesis via algae. The > financialization of nature is proceeding rapidly, bringing with it all manner > of contradictions. > > Due to internecine competition-in-laxity between climate negotiators > influenced by national fossil fuel industries, the UN summits appear unable > to either cap or regulate GHG pollution at its source, or jump-start the > emissions trade in which so much hope is placed. European and United Nations > turnover plummeted from a peak of US$140 billion in 2008 to US$130 billion in > 2011, US$84 billion in 2012, and US$53 billion in 2013 even as new carbon > markets began popping up.[1]1 But after dipping to below US$50 billion in > 2014, volume on the global market is predicted by industry experts to recover > to US$77 billion (worth 8 gigatonnes of CO2 equivalents) in 2015 thanks to > higher European prices and increased US coverage of emissions, extending to > transport fuels and natural gas.[2]2 > > However, geographically extreme uneven development characterizes the markets > in part because of the different regulatory regimes. Since 2013 there have > been new markets introduced in California, Kazakhstan, Mexico, Quebec, Korea > and China, while Australia’s 2012 scheme was discontinued in 2014 due to the > conservative government’s opposition. The price per tonne of carbon also > differs markedly, with early 2015 rates still at best only a third of the > 2006 European Union peak: California around US$12, Korea around US$9, Europe > around US$7.3, China at US$3-7 in different cities, the US northeast Regional > Greenhouse Gas Initiative’s voluntary scheme at US$5, New Zealand at US$4 and > Kazakhstan at US$2. The market for CDMs collapsed nearly entirely to > US$0.20/tonne. > > These low prices indicate several problems. > > * First, extremely large system gluts continue: 2 billion tonnes in the EU, > for example, in spite of a new “Market Stability Reserve” backstopping plan > that aimed to draw out 800 million tonnes. > > * Second, the new markets suffer from such unfamiliarity with trading in such > an ethereal product, emissions, that volume has slowed to a tiny fraction of > what had been anticipated (such as in China and Korea). > > * Third, fraud continues to be identified in various carbon markets. This is, > increasingly, a debilitating problem in the timber and forest-related schemes > that were meant to sequester large volumes of carbon. > > * Fourth, resistance continues to rise to carbon trading and offsets in Latin > America, Africa and Asia, where movements against reducing emissions from > deforestation and forest degradation (REDD) are linking up. > > An overriding danger has arisen that may cancel the deterrents to carbon > trading: the international financial system has overextended itself yet > again, perhaps most spectacularly with derivatives and other speculative > instruments. It needs new outlets for funds. The rise of non-bank lenders > doing “shadow banking,” for example, was by 2013 estimated to account for a > quarter of assets in the world financial system, US$71 trillion, a rise of > three times from a decade earlier, with China’s shadow assets increasing by > 42% in 2012 alone. The Economist last year acknowledged that “potentially > explosive” emerging-market shadow banking is huge, fast-growing in certain > forms and little understood. As for the straight credit market, the main > result of Quantitative Easing policies was renewed bubbling, with US$57 > trillion in debt added to the global aggregate from 2007-14, of which US$25 > trillion was state debt. By mid-2014 the total world debt of US$200 trillion > had reached 286 percent of global GDP, an increase from 269% in late 2007. > > Global financial regulation appears impossible given the prevailing balance > of forces, witnessed in failures at the 2002 Monterrey and 2015 Addis Ababa > Financing for Development initiatives and various G20 summits after 2008. As > a result, the BRICS are especially important sites to track ebbs and flows of > financial capital in relation to climate-related investments. In reality, in > relation to both world financial markets and climate policy, the BRICS are > not anti-imperialist but instead subimperialist. > > The first-round routing of CDM funding went disproportionately to China, > India, Brazil and South Africa from 2005 until 2012, but by then, the price > of CDM credits had sunk so low there was little point in any case. Moreover, > the other Kyoto offsetting mechanism, Joint Implementation, has over 90% of > offsets issued by Russia and Ukraine with very limited transparency. > > Similar problems of system integrity plague the carbon markets that have > opened in China. At the Chinese Academy of Marxism, for example, Yu Bin’s > essay on ‘Two forms of the New Imperialism,’ argues that along with > intellectual property, the commodification of emissions is vital to > understanding the way capital has emerged under conditions of global crisis. > The US$4 trillion lost in the Chinese stock market speculative bubbling in > June-July 2015 was one indication that there are no special protections > offered by what is termed ‘socialism with Chinese characteristics’. The > country’s financial opacity and favouritism present profound problems for > carbon trading. As Reuters reported on July 1 2015, > > ‘China said last week it would need to invest 41 trillion yuan ($6.6 > trillion) to meet its U.N. pledges. Some of that investment will be raised > through the national carbon market, expected to cover around 3 billion tonnes > of carbon emissions – about 30 percent of the annual total – by 2020. But > liquidity on China’s seven pilots schemes has remained low, with just 28 > million permits traded over two years, only about 2 percent of the permits > handed out annually. Prices in five of the markets have fallen sharply, with > the Shanghai market ending its compliance year on Tuesday at 15.5 yuan > (US$2.6), down 38 percent from its launch. Permits in the biggest pilot > exchange in Guangdong have dropped 73 percent to 16 yuan.’ > > Regardless of the reality of carbon trading contradictions, if policy > continues to favour corporate strategies, an even greater speculative bubble > in carbon finance can be anticipated in the next few years, as more BRICS > establish carbon markets and offsets as strategies to deal with their > prolific emissions. In South Africa, neither the 2011 National Climate Change > Response White Paper nor a 2013 Treasury carbon tax proposal endorsed carbon > trading. In part because of the oligopoly purchasing conditions anticipated > as a result of two vast emitters far ahead of the others: the state > electricity company Eskom and the former parastatal Sasol which squeezes coal > and natural gas to make liquid petroleum at the world’s single largest > emissions point source, at Secunda near Johannesburg. But by April 2014, > carbon trading was back on the official policy agenda, thanks to the British > High Commissioner whose consultants colluded with the Johannesburg Stock > Exchange to issue celebratory statements about “market readiness.” > > With all of South Africa’s carbon-intensive infrastructure under > construction, the official Copenhagen voluntary promise by President Jacob > Zuma – cutting GHG emissions to a “trajectory that peaks at 34% below a > business as usual trajectory in 2020” – appear to be impossible to uphold, > just four years after it was made. The state signalled its reluctance to > impose limits on pollution in February 2015, when Environment Minister Edna > Molewa gave Eskom, Sasol and other major polluters official permission to > continue their current trajectories for another five years, ignoring Clean > Air Act regulations on emissions of co-pollutants such as sulphur dioxide and > nitrogen dioxide. > > Other BRICS countries have similar power configurations, and in Russia’s case > it led to a formal withdrawal from the Kyoto Protocol’s second commitment > period (2012-2020) in spite of huge “hot air” benefits the country would have > earned in carbon markets – for not emitting at 1990 levels – as a result of > the industrial economy’s deindustrialization due to its exposure to world > capitalism during the early 1990s. That economic crash cut Russian emissions > far below 1990 Soviet Union levels during the first (2005-2012) commitment > period. But given the 2008-13 crash of carbon markets, Moscow’s calculation > shifted away from the Kyoto Protocol, so as to promote its own oil and gas > industries without limitation. > > The attraction of carbon trading in the new markets, no matter its failure in > the old, is logical when seen within a triple context: a longer-term > capitalist crisis which has raised financial sector power within an ever-more > frenetic and geographically ambitious system; the financial markets’ > sophistication in establishing new routes for capital across space, through > time, and into non-market spheres; and the mainstream ideological orientation > to solving every market-related problem with a market solution, which even > advocates of a Post-Washington Consensus and Keynesian economic policies > share. Interestingly, even Paul Krugman had second thoughts, for after > reading formerly pro-trading environmental economist William Nordhaus’ > Climate Casino, he remarked, “The message I took from this book was that > direct action to regulate emissions from electricity generation would be a > surprisingly good substitute for carbon pricing.” This U-turn is the > hard-nosed realism needed in understanding how financial markets continue to > over-extend geographically as investment portfolios diversify into distant, > risky areas and sectors. Global and national financial governance prove > inadequate, leading to bloated and then busted asset values ranging from > subprime housing mortgages to illegitimate emissions credits. > > No better examples can be found of the irrationality of capitalism’s > spatio-temporal-ecological fix to climate crisis than a remark by Tory > climate minister Greg Barker in 2010: “We want the City of London, with its > unique expertise in innovative financial products, to lead the world and > become the global hub for green growth finance. We need to put the sub-prime > disaster behind us.” As BRICS are already demonstrating, though, new > disasters await, for both overaccumulated capitalism in general and for what > will be, for the next few years at least, under-accumulating carbon markets. > > > > > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
